Spark, Vodafone and Callplus together represent 94 percent of the residential internet market and all have put up their prices for home internet packages.

Internet service providers blame the rises on the Commerce Commission’s recent draft decision which reduced the price companies pay for use of the copper wire network.

The charges relate to what Chorus (the wholesaler) charges internet service providers and telcos like Spark, Vodafone, Orcon, Slingshot and Flip, for accessing their copper infrastructure which was deployed years ago by the Post Office. Those wires run down almost every street in the country and are the phone lines we have been using for decades.

Because it is a monopoly, the price that the wholesaler can charge is regulated by the Commerce Commission.

In 2011, when Telecom was split into a retail arm (Telecom) and a wholesale arm (Chorus), the Commission had to work out what Chorus’s wholesale services were worth, and what price they would charge internet service providers and telcos, including Telecom (now Spark) to use those services.

The price was originally set at about $45 per customer per month. Read more »

Countdown has some work to do repairing its reputation with suppliers in New Zealand. So let’s have a look at the job requirements and see how important supplier relationships are to Countdown. Read more »

Our Commerce Commission recently received more than 90 complaints from suppliers being strong armed by Progressive/Countdown.

They had a cursory look and found…nothing.

Countdown, despite the more than 90 complaints claimed vindication.\Meanwhile in Australia, their ACCC has found a remarkably similar story…and slammed the supermarket chain they nailed with millions in fines.

Australian supermarket chain Coles will pay A$11.25 million in fines and costs and potentially far more refunding suppliers for illegally squeezing them for funds.

The food and liquor giant’s settlement with the Australian competition watchdog over charges of unconscionable conduct in its treatment of grocery suppliers was accepted by the Federal Court on Monday.

The nation’s second largest supermarket chain had deliberately and illegally misused its market power to squeeze small suppliers for money, judge Michelle Gordon told the court.

The verdict was welcomed by the Australian Food and Grocery Council, which also applauded Coles and Woolworths for working with it on a code of conduct.

However the industry body has warned members in writing about Woolworths also seeking to recoup money for “profit gaps”, although it has not facing any charges.

The payments to Coles filled what it called its “profit gaps” or targets, which in reality meant profit shifting and deducting money it was supposed to pay suppliers.

Because Coles represented a significant proportion of the small suppliers’ sales, it was able to successfully pressure them by threatening to stop buying their products, the court found.

WOOLWORTHS buyers have told suppliers their products could be pulled from shelves just days before Christmas if they refuse to fund the supermarket giant’s new Cheap Cheap advertising campaign.

“I was asked for a contribution of almost $1 million, and when I refused to pay I was told a ‘range review’ was underway and I would be informed of the outcome early next week,” said the sales manager of one of Australia’s leading health product companies.

“The implied threat is that some of my products will no longer be stocked if I don’t pay up.”

Woolworths staff have also been accused of telling suppliers the payment requests had the “endorsement” of the Australian Consumer and Competition Commission (ACCC) – a claim that the consumer watchdog rejects. Read more »

However today we see the Commerce Commission clearing Countdown from any anti-competitive behaviour, saying that it has investigated 90 complaints.

After a disasterous PR year for Countdown, its boss Dave Chambers is now on a PR offensive saying he’s been exonerated and that “the shadow of these false allegations” had been distracting for the company, alongside having a crack at former Labour MP Shane Jones.

All is not quite as rosy for Countdown as they would like, and the 90 complaints shouldn’t be dismissed quite so quickly. It’s not like it was one or two complaints… 90 complaints indicate they’ve got some “communication problems”.

To have ‘numerous suppliers asked that they not be identified’ should further demonstrate to Dave Chambers that all is not well with their supplier relationships.

The Commerce Commission’s observations that despite “Progressive’s conduct in each investigative case was not likely to be unlawful” they cautioned a number of parties, and included the warning:

exchanging information about future competitor behaviour, or discussing supplier interactions with a competitor. These types of exchanges create an environment in which anti-competitive agreements or conduct can easily emerge. This creates significant risk for the parties involved, including employees. Such exchanges and discussions should be avoided.

The Commerce Commission Report also says:

We accept that a smaller retailer may not be able to apply the same commercial pressure as Progressive. However, that in itself does not mean that Progressive has taken advantage of any substantial market power.

The Commission was only able to look at the letter of the law. In Labour’s view the law is not strong enough. In Australia the ACCC is currently prosecuting Coles for anti-competitive behaviour and has a code of practice.

The UK has an independent adjudicator with a mandatory code of practice. In that country there are ten dominant supermarket players who effectively control 85 per cent of the market and that has been judged to be too much concentrated market power. In New Zealand there are two dominant players, with 95 per cent market share.

My spies in Parliament are telling me that Countdown chief lobbyist Sue Wood has been sent in to calm the horses. Gee that’ll be a welcoming sight.

In the election the Labour party presented us with a concept for lowering power prices…removing competition from the market, and having state control.

It was an idiot idea, from the party of idiots. All around the world the plan has shown to be a complete failure, yet Labour ran with policy on the heroic assumption that they could command the economy to lower prices by removing competition.

Then in today’s Herald we have another Labour idiot mouthing off about another industry, but his solution is to increase competition, in stark contrast to their power policy.

Labour’s housing spokesman Phil Twyford has raised concerns about anti-competitive building industry practices after the world’s second biggest wallboard maker said it was reviewing its structure in New Zealand.

Twyford is concerned about German-headquartered Knauf Plasterboard after it said its operation here was being examined. “A review of the Knauf Plasterboard New Zealand structure is currently under consultation,” Knauf said yesterday. Read more »

After being busted by their suppliers for mafia style stand-over tactics and trying to run a whispering campaign against anyone who welched on them to the Commerce Commission, Countdown are now throwing their toys out of the cot and refusing to attend the Food & Grocery Council conference laters in the year.

There were rumbles around the bar leaners at last years conference from suppliers about Countdown’s behaviour, and it has come to a head this year. They only have themselves to blame, but they continue to blame the industry representative group and have former National party president Sue Wood running around putting pressure on people.

The latest tactic to pressure the FGC into silence is to withdraw from the conference.

I’m pretty sure that Foodstuffs will be pleased with that, having unfettered access to all the suppliers in a convivial atmosphere without the interference of the team from Countdown.

Dave Chambers seriously needs to get a grip and stop playing the bear in the pit. Whilst a few dogs will get mauled ultimately the bear winds up dead.

Supermarket giant Progressive Enterprises will snub its suppliers’ annual industry conference because it has been stung by allegations it bullied them, the Australian-owned company that runs the Countdown chain has confirmed.

But suppliers are reporting an improvement in their relationship with Progressive, says the Food and Grocery Council (FGC).

The council, which represents suppliers, backed claims made in Parliament early this year by then Labour MP Shane Jones that Progressive was demanding retrospective payments from suppliers under threat of having their products removed from supermarket shelves. Read more »

2014 has been an unmitigated disaster for supermarket giant Countdown.

With the Commerce Commission’s investigation in full swing and, from what I’m hearing they’re leaning towards believing the suppliers over the bullies at Countdown’s head office, things are not going well for NZ boss Dave Chambers.

Maybe Dave Chambers would like to try the stunt its owners at Woolworths are now watching roll out in Australia with its arch rival Coles.